Experts, Doctors, Victims urge for 40% tax under GST on all tobacco products to curb the epidemic of cancer

Experts, Doctors, Victims urge for 40% tax under GST on all tobacco products to curb the epidemic of cancer
Proposed 26 % sin rate on tobacco to negatively impact revenue and public health
A Sin tax rate below 40% would certainly make all tobacco products even more affordable to youth and other vulnerable populations.

Jaipur,  November 1st, 2016 :  While conversion to GST is generally a good thing, the GST Council's proposal on October 20th for 26% GST sin rate will be seriously injurious to health! Fixation of sin tax on tobacco at less than 40% would amount to making tobacco products affordable to youth, blunting the edge of India's tobacco policy. The sin tax is intended to pay for the damage caused to society by products like tobacco, and also to raise their prices to reduce their usage.  Fixing the tax rate at 26%  would defeat both purposes; it would slash current revenues from tobacco and encourage consumption of tobacco products among vulnerable populations, including children and youth, by making tobacco products more affordable.

India has the second largest number of tobacco users (275 million or 35% of all adults in India)   in the world – of these at least 10 lakh die every year from tobacco related diseases. Tobacco-use imposes enormous health and economic costs on the country. 

There is certainly an overarching consensus that goods that are harmful to society categorized as “sin” such as tobacco be taxed at the highest rate under GST as recommended in the Chief Economic Advisor report which

h seeks a 40% GST sin rate on all tobacco products including cigarettes, bidis and chewing tobacco.  The GST council meeting that concluded on October 20th proposed a much lower 26% GST sin rate which would have significant impact on the revenue as well as the health of our nation, both of which require serious consideration.  The rationale for a sin tax is twofold, to pay for the damage caused to society by products like tobacco, and secondly, to increase the price and reduce their usage.  A 26% rate would defeat both purposes – it would significantly reduce current revenues from tobacco and would actually make tobacco products more affordable and encourage consumption, especially among vulnerable population including children and youth. 

According to Dr. Rijo John, Assistant Professor, IIT Jodhpur, “Compared to a GST Sin rate of 40%, imposing a 26% Sin rate would reduce total tobacco tax revenue by almost one fifth (17%, or roughly Rs.10, 510 crores) even if the government retains the current excise on tobacco products post GST. Clearly, 26% Sin rate will be well below the rate required to maintain a revenue neutral position for tobacco and will significantly reduce tax burden on ALL tobacco products since the existing average VAT rates themselves are higher than 26% on most tobacco products.”  

Tobacco-use imposes enormous health and economic costs on the country.  The total direct and indirect cost of diseases attributable to tobacco use was a staggering Rupees 1.04 lakh crore ($17 billion) in 2011 or 1.16% of India’s GDP.  

“A much lower GST rate would make all tobacco products even more affordable to youth and other vulnerable populations, leading to the impact of the tobacco epidemic becoming more severe driving up health care costs and resulting in productivity losses. This will certainly lead to an increased number of fatalities per year, which is not a good news for any country. I firmly believe & urge that the government should tax the tobacco products at very high rate to ensure it discourages mass consumption” Dr. Pankaj Chaturvedi, Oncologist, Tata Memorial Hospital, Mumbai 

Approximately 48 percent of men and 20 percent of women consume tobacco (35 percent of the adult population overall) - of these at least 10 lakh are dying each year from tobacco related diseases. Bidis comprise 48 percent of the tobacco market, chewing tobacco 38 percent and cigarettes 14 percent so it is evident that bidis account for a significant portion of those deaths. 

According to, Dr.Pawan Singhal, Associate Professor at SMS Hospital & State Patron of Voice of Tobacco Victims (VoTV),  “The current tobacco tax differentiates significantly between various forms of tobacco products (such as bidis, smokeless tobacco and cigarettes). Continuing to sell cheap, virtually tax-exempt bidis to the underprivileged, even in the new GST system, will ensure that the poor continue to be trapped in vicious cycle of poverty and ill health, exacerbated by affordability and addiction which causes them to spend more on tobacco and less on food, healthcare and education. We would urge the central and state governments to tax all forms of tobacco including bidis at 40 percent under GST regime, to insulate the population from its ill effects.”

“With 85% of smoked tobacco being consumed as Bidis, a large percentage of the 10 lakh tobacco related deaths occur because of bidi use. Therefore, treating bidis under the highest category for sin products to attract maximum tax would not only save the lives of lakhs of poor Indians but would also help reduce the overwhelming health disparities between various strata of society. The government should treat such issues on a priority basis & ensure that there is no distinction made amongst all forms of tobacco and are taxed at highest possible rates so as to keep our most vulnerable populations away from falling prey to it”

"I lost my husband at a young age due to tobacco. I am suffering because of a wrong 'personal choice' made by him. I and my two daughters were not only pained emotionally but devastated financially. How can even anyone think of giving any kind of subsidy to this factory of widows and orphans? Government should not be seen supporting an industry that destroys 10 lac families each year for amassing vulgar profits.” Mrs. Sumitra Pednekar, wife of Maharashtra's Former Home and Labour Minister Satish Pednekar , who died of oral cancer.

Based on current scenarios under consideration, a 40% Sin rate combined with the existing excise tax and top-up state rights to tax tobacco appears to be the best scenario for public health and revenue.  This will not only help us maintain the current tax burden on tobacco, and will prevent more Indians from falling prey to life-threatening diseases and caught in a cycle of perpetual poverty!

MPs, Doctors, Tobacco Victims and Public Health Advocates Appeal for Higher Taxes on Tobacco Products under the GST Regime

Jaipur, October 17th: It is well known that tobacco and tobacco products are globally recognized as “sin goods” on account of their serious adverse impact on public health.  Practically all major countries in the world subject tobacco products to high rates of consumption taxes with a view to garner additional revenue on one hand and discourage its use on the other. Higher taxes are particularly effective in reducing tobacco use among vulnerable populations, such as youth, pregnant women, low-income smokers and chewing tobacco users.

Voice of Tobacco victim, Sambandh Health Foundation, MPs, Doctors, Victims of Tobacco Use and Public Health Advocates have appealed to the GST council to recommend and accept a high tax rate of 40 percent under GST on all types of tobacco products including cigarettes, bidis and chewing tobacco to discourage their use and addiction amongst Indians.

A comprehensive economic reform like GST offers the government a unique opportunity to tax tobacco uniformly at the highest GST rate of 40% to and save millions of Indians from dying prematurely of tobacco related diseases.

“Government should make tobacco prohibitively expensive in GST era. There is no justification for giving any subsidy to a product that kills every second user prematurely”, Dinesh Trivedi, MP, Trinamool Congress and Former Union Minister of State for Health and Family Welfare.

Ashwini Kumar Chaube. Ex Health Minister of Bihar and MP, Bharatiya Janta Party – “As a Health Minister of Bihar I had banned gutka and raised taxes on tobacco products including bidi. I am sure GST council will put tobacco in highest tax category. It will save millions of lives”.

Tobacco-use imposes enormous health and economic burden on the country.  Each year, almost 1 million Indians die from tobacco-related diseases in India.  The total direct and indirect cost of diseases attributable to tobacco use was a staggering Rupees 1.04 lakh crore ($17 billion) in 2011 or 1.16% of GDP. Tobacco-attributable direct medical costs alone are around 21% of national health expenditure.  Indeed the costs of tobacco are far greater than what the Indian government/states gain in tobacco excise revenue (just 17% of total health cost).

Even as the industry is opposing the recommendations to impose the ‘sin tax’ rate of 40 percent on tobacco, it is important to note that tobacco taxation in India is way below global standards. According to Dr. Rijo John, Assistant Professor, IIT Jodhpur, “A recent report from WHO shows that current cigarette taxes as a percentage of retail prices in India are lower than even neighboring countries such as Sri Lanka and Bangladesh and rank 80th in the world. A 40% GST rates + central excise duty at the current levels would just about maintain the current tax burden on tobacco products. It is also important to allow states to maintain their right to impose top-up taxes on tobacco products, in order to actually make tobacco and tobacco products less affordable over time.”

“I see no logic in giving tax subsidy to bidi (or any tobacco product) in GST. With current tax pattern on bidi, consumer and the nation are losers whereas handful of business families (bidi industry owners) are making vulgar profits. Most of the Bidi Industry families wield great political clout. They violate every law related to minimum wages, child labor, healthy workplace etc. Excise and Tax violation remains rampant in this unorganized industry. It is shocking that there is no tax on Bidis in many states. All tobacco products should be taxed very high in GST era”, Dr. Pankaj Chaturvedi, Oncologist, Tata Memorial Hospital, Mumbai. 

According to, Bhavna Mukhopadhyay, CEO, VHAI “The GST regime should ideally act as a deterrent to the consumption of health hazard causing substances such as Cigarettes, Bidis etc. through higher taxes. All differentiations should be done away with regards to tobacco and tobacco products and taxed at the highest slab under GST, since lower GST rates would contribute to their affordability and end up promoting their increased consumption amongst most vulnerable sections of population pushing them below the poverty line.” 

Bidis which comprise 48 percent of the tobacco market, (as compared to chewing tobacco which is 38 percent and cigarettes 14 percent) have been subjected to very low central and state taxes under the false pretext of protecting bidi rollers’ livelihood. However, the reality is that low taxes and exemptions only benefit the bidi industry owners. “We strongly support the highest level of tax for bidis under GST and petition that some of these bids taxes are used to improve our wages/living conditions as well as provide alternative livelihoods”, says, Nazim Ansari, Secretary Abul Kalam Azad Jan Sewa Sansthan (representing around 6000 bidi workers in Uttar Pradesh).

Public Health fraternity emphasized how critical it is to effectively regulate and tax all forms of tobacco uniformly under GST regime to protect India’s most vulnerable populations – the time has come for the government to step up to protect India’s 67.5 million bidi smokers from an untimely and painful death. A healthy and productive citizen will contribute more to nation building and help in realizing India’s dream of becoming a world economic power. 

Beware: Action to be taken as per Juvenile Justice Act in Rajasthan

-Nodal officers to be appointed in all Police Stations of the State 
-Imprisonment up to 7 years and fine up to Rs 1 lakh

07 Oct. 16 Jaipur, The Juvenile Justice Act is applicable on any person who offers or sells tobacco products to any minor. The provisions of this Act are now being strictly implemented in Rajasthan, with offenders facing imprisonment up to seven years and fine up to Rs 1 lakh. The Rajasthan Police, DG, has issued a circular  the Commissioner of Police of Jaipur, Jodhpur and Superintendents of Police of all districts of the state to implement the provisions of the Act. Voice of Tobacco Victims (VoTV) state patron had met the DGP in month of September in this regard.

Issuing the directives, DIG Mr.Manoj Bhatt has instructed that one police officer in each police station should be designated as a child welfare officer under section 107(1). The Act had been amended to include these provisions on January 15, 2016. Bhatt has made special mention of section 77 of the amended Act. Under this section, if any person, other than a qualified medical practitioner, gives tobacco products or intoxicating beverage or any other narcotic or alcoholic products, he or she will be liable for imprisonment up to seven years and fine up to Rs 1 lakh. Bhatt has pointed in the circular that tobacco products have been included in it. Besides those selling tobacco products to minors, those promoting use of tobacco products by minors in any manner will also be liable to face criminal proceedings. Particular attention should be paid against such offenders within 100 yards of any educational institutions. Action should be taken against such offenders and the matter included in the Monthly Crime Review (MCR) reporting of The Cigarettes and Other Tobacco Products Act (COTPA). He said that Nodal officers appointed in district headquarters & sub divisional headquarters .

Dr.Pawan Singhal, Associate Professor at SMS Hospital & State Patron of Voice of Tobacco Victims (VoTV), said the earlier Act & COTPA, was not being effective in checking tobacco use among minors as offenders selling tobacco products to minors were fined only Rs 200.

He said 27.5 crore people in India use tobacco and a major portion of them start tobacco consumption from a young age. According to a survey by Global Adult Health, addiction to tobacco use in India starts at 17 years of age. Global Youth Health survey has revealed that 20% of children in India use tobacco. As many as 5500 children and teenagers consume tobacco every day. On an average, everyday 350 children start tobacco use in the state. 32% people in the state have tobacco addiction. The new amendment and circular will save our future generations from the deadly addiction to tobacco products. It has already been established that every third person who dies of cancer, cardiac arrest or respiratory problems had contracted the illness due to tobacco consumption.